When Lollapalooza disappeared from view after its seventh run in 1997, there wasn’t much of an outcry over what was lost. Its fans moved on to other things. The last of the first batch of Lollapaloozas seemed like a curious return to the festival’s origins, shifting away from mainstream alternative rock bands in favor of spotlighting a smaller number of cutting edge artists, particularly electronica acts such as the Orb, Orbital, and Prodigy, along with your random Snoop Dogg mixed in. As Lollapalooza’s core audience moved on to other things, the financial viability of an affinity oriented touring production not linked to a particular audience was in question. When the festival returned after a five-year hiatus, only to be grounded indefinitely in 2004 due to poor ticket sales, Lollapalooza seemed to have been an idea that had run its course.

Fortuitously, a cadre of seasoned concert promoters in Austin, Texas happened to be circling above, looking to create a music festival that would serve as a calendar bookend to industry confab South by Southwest. Lisa Hickey, marketing director for C3 Presents, the group that currently coordinates the production and programming of Lollapalooza and Austin City Limits Music Festival, notes: “When we were first doing research on creating Austin City Limits Music Festival, we compared different festivals, and found Lollapalooza had amazing brand recognition—over 95% of concertgoers were familiar with Lollapalooza.” When Lollapalooza was canceled, Charlie Jones, a partner at Capital Sports and Entertainment, which launched the Austin City Limits (or ACL Festival) in 2002, sprung into action. Hickey recalls: “Charlie reached out to Lolla almost immediately after hearing that they were forced to cancel in 2004. He named a lot of Lolla’s strengths, how he liked to transform it into a destination festival. Charlie kind of caught Perry by surprise. Perry wasn’t sure why we wanted to do this. But the amphitheaters were overcharging for a bad experience. It was great timing for Charlie to come in.”

The decision to rebrand Lollapalooza as a destination festival made practical sense. The costs and the high variability of putting on the festival as a touring show were wild cards; bad weather, poor acoustics, poor production values, or a fickle local audience could sink a tour. As the Lilith Fair would discover in attempting to reboot its festival in 2010, the uncertainties of certain markets made the idea of a touring festival that much more risky. A destination festival turned the concept on its head. Instead of facing the nightly challenge of barnstorming in search of an audience, organizers could pick a single accessible location with the infrastructure and support network capable of putting on a first class production, assemble talented production people, and establish a tradition through a long-term agreement.

There certainly was risk at play in transforming Lollapalooza into a single destination event. While major festivals have redefined the concert landscape, they were a relatively new phenomenon in the U.S. A well-conceived and well-executed tour could earn enough to offset poor ticket sales or logistics in a handful of less lucrative markets. In contrast, a destination festival also meant putting all one’s eggs in one basket, in a marketplace where large destination events had traditionally only been tied to a special event. Most notably, the famine in Ethiopia spurred Bob Geldof and other musicians to organize the once-in-a lifetime Live Aid concerts in London and Philadelphia. Subsequent benefit shows, such as Farm Aid and the Tibet Freedom concerts organized by the Beastie Boys, demonstrated the potential for the sporadic success of destination events.

Gary Bongiovanni, one of the leading industry experts on the concert business and Editor-in-Chief of trade publication Pollstar, explains that festivals had largely been a European phenomenon. “Europe has a shorter window for concerts. The relative absence of large venues such as indoor arenas, meant that European markets were dealing with relatively short windows for booking concerts, typically in the summer months.” Thus, the tradition of large summer festivals took root in Europe: “Acts grew accustomed to playing large festivals in Europe, such as Glastonbury and Reading. As a practical reality, if you wanted to play in a country like Denmark, you got accustomed to playing Roskilde, with roots going back to the 1970s, and the other large festivals.” In contrast, the concert calendar in the U.S. had largely been dominated by outdoor music theaters in the summer, with the combination of stadium and club shows at other times of the year.

With a new partner on board, and the creative visionary still attached, Lollapalooza was on its way to returning, but it still needed a home, since the viability of the touring model was very much in question. As the organizers considered cities, one stood out.

A destination fest. But where? Having a central location, an infrastructure, and a history hosting major events certainly couldn’t have hurt the city in question. But for Perry Farrell, Chicago was a market that consistently demonstrated a special excitement for the Lollapalooza concept. To test this theory, Farrell, one year, had organizers announce ticket sales for the Chicago leg of the tour before announcing which artists were on the bill. The show sold out almost immediately.

Artistically, Lollapalooza’s return as a single destination festival in 2005 had been a rousing success. Despite some sound-bleed issues, with Liz Phair straining to be heard over the pogoing Britpop of the Kaiser Chiefs coming from across the field, the festival setup afforded fans a great way to see a plethora of artists. The return of the Pixies was a big story and the short distance between three stages also meant one could catch the likes of Tegan and Sara, Kasabian, Dinosaur, Jr., and Drive By Truckers without skipping (or missing) a beat.

As the crowd waited for headliners the Killers and the Dandy Warhols, an up-and-coming band that was gaining buzz on underground music blogs took the stage. Scheduled to play the smaller Pitchfork Intonation festival in Chicago that summer, they canceled and moved up as a late addition to the Lollapalooza lineup, a sign of the intense hype building on the Internet. It was a colorful ensemble wielding a dizzying array of instruments—an accordion, a mandolin, a fiddle—and demonstrating an intensity and joie de vivre that one might expect from a house band at the corner pub, not on a festival stage. As excitement over the breakout performance cascaded across the field, the band members did the unexpected: Marching in a precise conga-like formation, the band took its act directly out into the audience, playing pied piper to a community of newly converted fans. Right then and there, the fans fortunate enough to see Arcade Fire make its U.S. festival debut knew they had witnessed something special.

In its first year back, the festival was a relatively cozy experience, featuring 50 bands spread across 46 acres and three stages over a two-day period. Smaller in scale and held over a much narrower footprint than later productions, the inaugural Chicago Lollapalooza was similar in size and scope to Austin City Limits when it first launched in 2002. Lisa Hickey says: “There was no real selection or bidding process. But when Charlie and our team looked at expanding the ACL model, building upon the success of working within a green space in an urban environment, with an emphasis on local food and art, we immediately liked Chicago.”

At the same time, the city of Chicago, which had experience hosting a collection of lakefront and neighborhood festivals, including the Taste of Chicago over the Fourth of July and the long-running blues and jazz festivals at either end of the summer, was receptive to another event that would broaden its portfolio and enhance tourism in the summer months. In choosing Chicago, the lads from Texas minimized the planning and logistical risks that tended to plague idyllic festival concepts set in remote locations. For every Burning Man, you have the whopping fiasco of the MtMx festival in Monterrey, Mexico in 2010, where scores of artists, fans, and even bus drivers abandoned the festival at the last minute due to security and logistical concerns. Chicago supplied the advantage of being a major tourist and convention destination, with the infrastructure in place to support hordes of fans.

After the success of the debut, Lollapalooza’s footprint and lineup have grown steadily to the behemoth it is today. Lollapalooza has come a long way since its inception, when Perry and his bandmates selected who would be on the first bill. With C3 on the production side and the William Morris Agency on the talent procurement side, this current arrangement has built on Farrell’s original vision to create a new type of concert experience, producing a festival within a hospitable urban environment and the amenities of a park district that knows how to support big crowds. According to Lisa Hickey, “Perry remains the visionary and plays a critical role as the figurehead. He has a lot of influence over the lineup and DJs, and also has had an instrumental role in certain aspects of the experience, such as creating and building up Perry’s stage and the Kidapalooza experience. He tends to have a lot of crazy ideas and they are usually all successful.”

One of Lollapalooza’s and Austin City Limits’ positive innovations has been their effort to bridge potential differences with local promoters and club owners by partnering to sponsor after-shows at local clubs. These allow diehard fans, as well as those interested in digging deeper into an artist they discovered during the day, the opportunity to see the bands in a more intimate setting. Most importantly, the after-parties bring in promoters and local club owners, encouraging them to support the festival, while offering out-of-towners the chance to experience some local flavor. At the same time, it allows local residents who don’t attend the festival to capture some of the spirit of the festival.

C3’s recognition of this dynamic is largely due to its own experience in promoting shows at small and mid-sized venues such as Stubbs and La Zona Rosa in Austin during South by Southwest and Austin City Limits. As Hickey explains, “What we liked about Jazz Fest in New Orleans was how there were activities to keep the party going through the city after an early outdoor curfew. We wanted to create the same vibe in Austin, and then Chicago. We felt it was an important part of the experience, as well as a way to be a better partner.” Chicago promoter Joe Shanahan adds: “I’ve worked with a lot of artists who wanted to continue playing late night shows at Metro. With the help of C3, we have had a series of after-shows, with donations from the various parties going to charity.”